Ingram Micro 2000 Annual Report Download - page 46

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INGRAM MICRO
Earnings per share
The Company re p o rts a dual pre s e n t ation of Basic Earnings per Share (“Basic EPS”) and Diluted Earnings per Share (“Diluted
E P S ” ) . Basic EPS excludes dilution and is computed by dividing net income by the weighted average number of common shares out-
standing during the re p o rted peri o d . Diluted EPS reflects the potential dilution that could occur if stock options and other commit-
ments to issue common stock we re exercised using the tre a s u ry stock method or the if-conve rted method, w h e r e applicabl e.
The composition of Basic EPS and Diluted EPS is as follows:
2000 1999 1998
I n c ome befo re ext ra o rdinary ite m $ 2 2 3, 7 5 3 $ 1 7 9, 6 4 1 $ 2 4 5,175
Weighted average shares 1 4 5, 2 1 3, 8 8 2 1 4 3, 4 0 4, 2 0 7 1 3 9, 2 6 3,810
Basic earnings per share before extraordinary item $ 1 . 5 4 $ 1.25 $ 1 . 7 6
W e i g h ted ave r age shares including the dilutive effect
of stock options (3, 4 2 7,109; 4, 3 8 0,505; and 10, 2 7 4 ,060
for Fiscal 2000, 1999, and 1998, re s p e c t i ve l y ) 1 4 8, 6 4 0, 9 9 1 1 4 7, 7 8 4,712 1 4 9, 5 3 7,870
Diluted earnings per share before ext ra o rdinary ite m $ 1 . 5 1 $ 1.21 $ 1 . 6 4
At December 30, 2000, January 1,2000, and January 2,1999, there were $220,035, $440,943,and $473,475, respectively, in
Zero Coupon Convertible Debentures that were convertible into approximately 3,051,000, 6,428,000, and 7,308,000 shares of
Class A Common Stock (see Note 7).These potential shares were excluded from the computation of Diluted EPS because their
effect would be antidilutive. Additionally, there were approximately 11,178,000;3,483,000; and 388,000 options in 2000,1999,
and 1998, respectively, that were not included in the computation of Diluted EPS because the exercise price was greater than the
average market price of the Class A Common Stock,thereby resulting in an antidilutive effect.
New accounting standards
In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133,
“Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”). FAS 133 was amended by Statement of Financial
Accounting Standards No. 137,“Accounting for Derivative Instruments and Hedging Activities — Deferral of the Effective Date of
FAS No. 133” and Statement of Financial Accounting Standards No. 138,“Accounting for Certain Derivative Instruments and
Certain Hedging Activities — an amendment of FASB No. 133.” As amended, FAS 133 establishes accounting and reporting stan-
dards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively refer red to as
derivatives),and for hedging activities. FAS 133, as amended, is effective for the Company in fiscal 2001.The Company does not
expect the adoption of FAS 133 to have a material impact on its reported consolidated financial condition or results of operations.
In September 2000,the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 140,
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities — a replacement of FASB Statement
No. 125” (“FAS 140”). FAS 140 revises the standards for accounting for securitizations and other transfers of financial assets and
collateral.The accounting standards of FAS 140 are effective for transfers and servicing of financial assets and extinguishments of
liabilities occuring after March 31,2001.The Company does not expect the adoption of FAS 140 to have a material impact on its
reported financial condition or results of operations.